In the commercial trucking business, there is not only one policy to cover every aspect of the industry and all mishaps that may occur. The way it works is to have a policy that meets the requirements of the law, and then request additional policies based on your business needs. Because of this, insurance companies will be able to give your trucking business a policy that will cover every one of your needs as they do vary from one business to another.
Due to the fact that the insurance business has seen many trucking company owners incur huge losses, they now know what policy to offer based on your operation. As a businessman, having a trucking umbrella insurance policy cover many aspects of your company is the smartest move you can make any liability. The following factors will help you when determining how much of an umbrella insurance policy to buy.
Determining the Trucking Umbrella Policy to Purchase
The price of trucking umbrella insurance has significantly risen in the past ten years. This means for small businesses, carrying high limits of liability has become more difficult than it used to be. No matter how high these prices have become, traders have been left with no choice as most clients require contracts with higher cover coverage limit.
If something happens today to your business, how much do you stand to lose? This is what you should determine as a business owner reviewing aspects of the trucking umbrella policy coverage when looking to purchase one for your business. After this, consider how the risk can be averted and how much aversion is possible. The bigger the risk, the higher your coverage should be. Due to a high aversion risk, some people prefer covering their businesses and all their assets just to be on the safe side. If the risk will affect the business in a small way, some prefer to gamble with the outcome.
Recent Court Case Outcome
In one recent court case where an accident has involved a commercial truck, the driver wasn’t to blame, yet the company ends up paying. Though every State’s legal ruling is different, in most cases, the rulings have gone against trucking companies and their drivers. This clearly shows you the risk of losing a case has increased and the need to have a trucking umbrella insurance policy cover you. The legal climate in your state should be able to help you in making an informed decision.
In case your truck is hauled by a third party, the chances of your company paying for the hauling services are very high. This exposes you to a higher loss rate in that they might hurt your business financially if left uncovered. With court awards being at all-time high, the umbrella policy coverage becomes more necessary to any trucking company.
The Change in Insurance Industry
The recent financial strain hasn’t spared the insurance industry either. This industry has seen its fair share of payouts and companies reluctant to offer trucking umbrella insurance policies. The results of lawsuits have been devastating and now only a few insurance companies are offering the coverage. Because of the low number of companies offering this type of coverage, the few players in the market have significantly increased the price of this coverage.
The CAS score requires companies to monitor their drivers’ safety as well as keep the trucks in good condition. This has seen more underwriters utilizing the trucking umbrella policy at the expense of trucking companies. Without a doubt, this will increase the premiums you pay for all your coverage including the umbrella liability coverage. This is because the score exposes them to more risk something insurance companies aren’t prepared to expose themselves to.
The basis of any insurance policy is the insuring agreement. This is not any different with trucking umbrella insurance as well. The insuring agreement is a reasonable place to begin when you are reviewing a policy. The insuring agreement consists of a wide statement defining the coverage provided.
There are three main features to look for in an insuring agreement. These are:
- A clear statement indicating that the insurance company will “pay on behalf.” This means, in case of any damages, the insurer will not provide reimbursement. Instead, they will pay upfront.
If an insuring agreement begins with the phrase “we will indemnify you,” this can mean that the insurer will compensate you only after paying for some expenses out of your pocket. This could be a something to consider since it could cause delays in your business in the case you don’t have enough cash to cover the expenses.
- The trucking umbrella insurance policy provided should have the same coverage for claims made or any occurrence as your primary liability policy. If your primary liability policy coverage applies to claims made, the umbrella policy coverage should also apply to claims made. If it applies on an occurrence basis with a liability policy, so should your umbrella policy.
- Your trucking umbrella insurance coverage should include a self-insured retention also known as SIR. This is a dollar amount which the insured pays out of their pocket for every claim covered by the insurer. This, however, does not apply when the damages are covered by your primary liability insurance.
Talk to your agent to see if it is advisable to look for a policy that exempts self-insured retention.
Always take time to read all the policy agreements and review details with your agent or broker.
Benefits of trucking umbrella insurance
Many individuals or even companies who have primary liability insurance are normally reluctant when it comes to applying for trucking umbrella insurance. However, umbrella insurance policies are very important because they cover other extra costs which are not covered by primary liability insurance.
There are several benefits of purchasing an umbrella trucking insurance some of which include:
- Protection from significant damage: Your primary auto insurance liability limit might be exhausted if your truck was at fault in an accident where another vehicle or property was destroyed. However, if you have an umbrella cover, it will definitely cover all the expenses making things easier for you.
- Libel or slander: Lawsuits could be filed as a result of something you wrote or said about another person. Usually, the standard auto insurance or liability policy coverage doesn’t have a provision for this.
- Malicious protection: This usually happens if you file a suit against another person and that person, in turn, sues you for maliciously, or wrongfully prosecuting them.
Although you might have liability insurance to cover each of the examples listed above, umbrella trucking insurance provides a better layer of protection when your primary liability coverage limit is exhausted.
Call us today to learn more about what coverage is right for your commercial trucking business or fleet.